Japanese equities soared to record highs on Monday following the election of Sanae Takaichi as leader of the ruling Liberal Democratic Party (LDP), positioning the pro-business veteran to become Japan’s first female prime minister.

The Nikkei 225 index closed up 4.75%, surpassing 47,000 for the first time, as investors responded positively to Takaichi’s economic stance, which favors increased government spending and low borrowing costs. Her ascent triggered gains across real estate, technology, and industrial sectors.

Takaichi, a former minister for economic security and internal affairs, is widely seen as a disciple of late Prime Minister Shinzo Abe and a staunch advocate of his “Abenomics” agenda—characterized by fiscal stimulus and monetary easing. She has also expressed admiration for Margaret Thatcher’s free-market policies.

Despite the stock market rally, the yen weakened sharply, hitting a record low against the euro and falling 1.7% against the U.S. dollar. Economists caution that while Takaichi’s policies may boost domestic growth, they could exacerbate Japan’s debt burden and currency volatility.

If confirmed later this month as the successor to outgoing Prime Minister Shigeru Ishiba, Takaichi will face a complex geopolitical landscape. Key challenges include renegotiating trade terms with U.S. President Donald Trump, addressing sluggish economic growth, and managing rising household costs amid stagnant wages.

Trump is expected to visit Japan later this month, and analysts anticipate Takaichi will seek to recalibrate currency dynamics and secure favorable trade terms. “She’ll want to get the dollar down and the yen up,” said Japan economist Jesper Koll.

Takaichi’s leadership marks a historic moment for Japan, breaking gender barriers while signaling continuity in economic policy. Her ability to navigate domestic pressures and international diplomacy will shape Japan’s trajectory in the months ahead.